ST Engineering net profit drops by 10% in 2020

The COVID-19 pandemic hits the company's aerospace business the hardest.

ST Engineering posted a net profit of $521.8m for the full year of 2020, lower by 10% from the $577.9 m reported in the previous year.

In a disclosure to the SGX, ST Engineering president and CEO Vincent Chong said the company has stayed afloat despite the COVID-19 pandemic.

“In a year when COVID-19 posed challenges for many industries, we had been able to keep balanced keel because of the underlying strengths of the Group and various mitigating factors including our cost reduction initiatives and government support,” Chong said.

For 2021, he expects an uneven recovery in the industries that ST Engineering participates in. These include aerospace, electronics, land systems, and marine.

“Going into 2021, we expect recovery to be uneven across the industries we participate in. The aviation industry remains subdued and is unlikely to recover to pre-pandemic levels in 2021. Nevertheless, we are focusing on delivering our order book, seizing new opportunities in areas like freighter conversions and cybersecurity,” Chong said.

ST Engineering's aerospace group posted a net profit of $192.9m in 2020, less 28% from the $268.9m reported in 2019. Its marine group likewise posted a hefty 45% loss in profit in 2020, to $28.3m from the $51.5m reported in 2019.

Its electronics group's profits grew by 11% in 2020 to $203.9m from $183.3m. Its land systems group also grew by 31% to $101.4m from the $77.3m reported in the previous year.

On 18 February, ST Engineering shares closed at $3.74, lower by $0.03 or 0.7% from its previous close of $3.77 per share.